Posted
by
Zonk
on Saturday June 23, 2007 @03:35PM
from the up-against-the-wall dept.

Spamicles writes "Thousands of U.S. webcasters plan to turn off the music and go silent this Tuesday, June 26th, to draw attention to an impending royalty rate increase that, if implemented, would lead to the virtual shutdown of this country's Internet radio industry. In March, the Copyright Royalty Board announced that it would raise royalties for Internet broadcasters, moving them from a per-song rate to a per-listener rate. The increase would be made retroactive to the beginning of 2006 and would double over the next five years. Internet radio sites would be charged per performance of a song. A "performance" is defined as the streaming of one song to one listener; thus a station that has an average audience of 500 listeners racks up 500 "performances" for each song it plays."

This is an interesting notion. Voluntarily shutting down blogs, podcast sites and others can maybe help bring some attention to the general public about how seriously worried content creators are about this.

Why let the corporations win? This is what they want. Internet silence? Why not march on Washington and demand that the people who represent us look out for OUR interests instead of the companies who run terrestrial radio stations?

It's for one day, to draw attention and/or cause action. We Americans do tend to respond most forcefully to any of our conveniences being interrupted.I think it'd be more effective to do follow Madonna's example from a few years back. Instead of going silent, they could spoken word broadcasts to summarize the problem and outline actions that citizens could take.

In fact, I'd like to see news organizations do the same. Of course, I'd also like to see pigs fly. Independent operators are looking at the destruct

I thought that as well, until I saw the list of participants on savenetradio.org. They have some big names like Yahoo Music, Pandora, and Rhapsody on there, so a lot of people are going to notice this IF they don't decide to change their minds at the last minute.

I'm sure those that listen to Internet radio will know ahead of time and are outraged by this decision. The rest of those that surf the Internet, those that make the laws, and just about everyone else (minus those that will see a financial gain from this ruling) don't know or care to know about what will happen to Internet radio.

... internet radio stations that weren't running for profit, but simply for the enjoyment of broadcasting? How does soundexchange propose to get blood from a stone? Or would that be disallowed completely, even if the person wasn't broadcasting any music that they might have say over?

Or would that be disallowed completely, even if the person wasn't broadcasting any music that they might have say over?

Exactly. Soundexchange gets paid even for non-member music. The law says that if you can't pay them, you don't play the music.

Now, there is one thing though, Soundexchange is required to allow artists and radio stations to contract directly and individually and is required to track all of these individual contracts so that they don't bill for those recordings. As creative commons grows, we might have a bit of a weapon to fight back with, if on our end we set up something more-or-less automatic for creating those contracts, it may turn out that we can swamp Soundexchange with them if they haven't already automated their end of the deal. If we can, and Soundexchange fails to keep up their end of the law, since they are "deputized" to operate the law, their failure might be prosecutable as malfeasance (if you can convince the Department of Justice to care about corporations), especially if it can be shown that at some step of the way they intentionally refused a contract or knowingly billed for a contracted performance.

As creative commons grows, we might have a bit of a weapon to fight back with, if on our end we set up something more-or-less automatic for creating those contracts, it may turn out that we can swamp Soundexchange with them if they haven't already automated their end of the deal.

That's intention of projects like the Antenna Alliance [antalliance.org], trying to make it easier for artists to release their works on CC licenses. At the same time it makes their music freely available directly through the website. So it give

Last.fm is, at least historically, a UK company. Since their servers (and the music) is broadcast from the UK, I'm not sure this will affect them. The problem now, of course, is that they're now owned by CBS. Still, with Lastfm being a UK branch/division, they should be safe.

because, like the radio, it broadcasts a stream, users 'tune in' to the stream. The stream does not reposition for new connections that have 'tuned in' with the exception of an obligatory "THANKS FOR LISTENING TO THIS STATION" or whatever. There is no interactivity, the user can not choose where in the history of the stream to begin listening. This is a bunch of crap. =(

If you want to find your local congress critter, and ping them on the subject, Go here [capwiz.com]. This link takes you to a nice little cgi app that takes your zip code, and gives you the phone numbers for your house and senate rep's, along with a short script of talking points. If the Internet Radio Equality Act, (S. 1353 in the senate, and H.R. 2060 in the house) can get some sponsors, and get passed, we're all in much better shape.

I actually emailed my congressman (Rick Boucher) back in late may about this issue. To my surprise, I actually received a response from him about a week ago about the matter. His response was that he was currently co-authoring H.R. 2060 in hopes of fixing this situation. At the very least, it gives me hope that we may be able to save internet radio.

The original rates were set for a five year period. After the five year period was up, new rates still had not been determined, so the old ones were used in the interim. These are the new rates, which take effect beginning when the previous five year period ended. Basically everyone paying the old rates knew full well that they were going to go up and be "retroactive", it is not something that was just sprung on them.

There is a lot of bullshit and propaganda on both sides of this, don't take either side's word for anything.

The UCC seems to say that, in a situation where a third party is supposed to set a price but fails to do so, the price is set by law as being a "reasonable price at the time for delivery". A price which obligates a reseller to shut down is hardly reasonable.

I'm not sure either, but if it's a choice between getting to continue doing what you love or going out of business, I'd at least have a long talk with my lawyer (and the lawyers of my fellow webcasters) about it before rolling over.

Bullshit. It was still sprung on them. Even if they knew that new rates would bedetermined whenever enough palms had been greased, they had no way of knowing towhat extent people were going to fuck them over. So, once the term of the old rateslapsed, what were they supposed to do? Shut down, because Amazing Kreskin^WACsays they should have known they'd be screwed? Or keep on going, expecting thingsnot to be too different?

Compare, for instance, a renter and a landlord. If I have a lease with my landlordto rent for $500 per month for a year and I make those payments everythings fine.If at the end of the year I continue on as a tenant at will, and still pay $500 permonth, then everything's fine. The landlord cannot come back in three months and tellme that the new rent is $750 per month and I owe him $750 in back rent; regardlessof whether or not he told me when the lease lapsed that he'd be raising the rent buthadn't decided how hard he wanted to screw me yet.

My question is, what will happen to the small stations where their small audience would have generated fewer fees than they have paid for the per-song rate? Will they get refunds? Of course, these are in the minority, but still...

Without knowing the actual details of the rate changes, it is hard to say for certain.. but this sounds like it could actually be a good thing for the smaller broadcasters. Unfortunately, the fact it is retroactive is repulsive.

I don't think you're getting the point of this law. The corporations who support it don't run internet radio and they don't want it to continue. This is the easiest way for terrestrial radio companies to make "Internet Radio" illegal.
If it's too expensive for your to create and run "myradio.com" then everyone will be forced back to 97.9 FM and they can continue their monopoly of the airwaves.

If that were indeed the plan, it would be by far the most stupid plan ever devised in the history of the world. After all, even if the terrestrial radio companies got every single radio station in the United States to shut down, the rest of the entire planet, which is still hooked up to the internet, would be able to easily fill in the void.

It's simply not possible for "internet radio" to die at this point. Only for the US to further drive its own companies into irrelevance.

Because the rates are set by the government. And when the old rates ran out, everyone agreed to keep using them and to pay the new rates retroactively once they negotiated new ones. It took them a year and a half of arguing over the new rates to achieve a settlement, so the backlog built up quite a lot.Since, per their own contracts, the Live365's of the world pay royalties on behalf of all the little guys that are their customers, and since Live365 (etc) didn't raise their billing rates, they're now in t

I run idobi Radio. We're an alternative/rock station that's doing fairly well, in terms of popularity.

The rates set by the royalty board is incredibly high and completely unfair. I agree I'm bias on the issue, but if the current rates are upheld, we would be required to pay $900,000/year just in royalties.

The current rates, if applied to traditional radio, would require a station like KROQ in Los Angeles to pay $1.4 billion/year just in royalties. Last year, they mad $67 million in revenue. If one of the most successful traditional radio station cannot afford these royalties, how can any internet radio station that still developing a revenue base be able to?

He didn't say royalty payments for over-the-air stations will increase, he was just making a point. If the most popular station in LA couldn't afford these payments (if they were to be given the same rates), how is it expected that a internet radio station could.

It seems that they got what they want in larger royalties but they're effectively shutting down the businesses that would pay those royalties. Exactly what do they think they've won here?
I'm not an internet radio listener but the logic of forcing your revenue stream, however pitiful you think it might be, out of business doesn't seem to be right for anyone involved.

They're not interested in actually getting these royalties. They're interested in protecting their already established FM and AM radio models. Where they choose what gets played and how many times.Internet radio is screwing that up.

This law wasn't made to make them more money, this law was made to shut down Pandora, Last.fm and Live365.

Old school radio and royalty payment markets don't want you listening to streaming music on the internet. You might make an artist they don't control popular and rich and che

You want a politician to respond to you? Snail mail is *still* the best way. Take ideas from a template if you must, but make most of the stuff, if not all of it up yourself. Be concise, but be sure and make your point. Bitching about a situation is obviously easier, but I got a reply back from Senator Boxer about a week ago (with the original letter sent in late May), which stated the following:

Thank you for writing to me regarding proposed changes to the assessment
of royalty fees that Internet radio broadcasters pay to musicians and
record labels. I appreciate hearing from you on this issue.

As you probably know, the federal Copyright Royalty Board (CRB) has
released its plan for charging online radio broadcasters for royalties.
The Internet Radio Equality act of 2007 (S.1353), which was recently
introduced in the Senate, would nullify the CRB's proposal and prevent the
new royalties assessment plan from taking effect.

S.1353 is currently being considered by the Senate Judiciary Committee.
Please be assured that I will take your comments under advisement, should
this legislation come before the full Senate.

Again, thank you for writing to me. Please keep in touch with me about
this and any other issue of concern to you.

The fact that this price increase is retroactive absolutely blows my mind, especially when you consider how large of a price increase this will be.
Retroactive changes to the law is one of the hallmarks of a failed legal system. How many radio broadcasters will even have the kind of money that is now being demanded of them?

Ok well here's talking yourself into the jaws of the lion on Slashdot and IANFRWW (I am no &*@!ing Right Wing Wan&#&!) but I struggle to see why this is inappropriate. The content of these stations is the music. The value of the station to advertisers is the number of people who are going to listen to it AND those stations use those stats to price their ads with the ad providers. Paying pay-per-track rather than pay-per-listener is clearly inequitable when the stations themselves earn money

Yeah, but why does this apply to Internet radio and not broadcast radio? The principle you described is the model for broadcast radio, yet broadcast radio does not pay this way. This is about the record industry eliminating internet radio. The record industry controls what is played over broadcast radio, there are too many internet radio stations for them to get that kind of control over. The other problem is that the amount of the pay-per-listener fee exceeds what advertisers are willing to pay per listener.

This is the crux of why everyone is so upset - it's impossible to grow to any significant size and be ad-supported under the new rates.An example: [idobi.com]

KROQ, "the nation's top rock station", would owe $1.4 _billion_ in royalties in 2010, if they paid the new internet rates. Their annual revenue is around $67 million. They are a highly successful radio station, and don't have to pay the per-user bandwidth fees that internet stations do (economies of scale). See the problem?

But KROQ doesn't have to pay the new Internet rates because it's not an Internet music station. Which is the whole point. This law seems to be designed solely to maintain the existence of traditional radio stations and put Internet music stations out of business. Royalty payments have nothing to do with it, other than as the means by which Internet music stations are to be destroyed.

17 USC 114(d)(1)(A) [copyright.gov] exempts "a nonsubscription broadcast transmission" from the exclusive right under section 106(6). I would assume that "broadcast" is defined as a radio transmission licensed by the FCC, not a packet stream sent to IPv4 address x.x.x.255 [wikipedia.org].

Internet radio differs from broadcast radio in the same way that recording tapes from a CD differs from uploading to a P2P network: you can reach thousands more people, and you can get perfect copies of the broadcasts by stream ripping. Hence they use this excuse as a far greater potential revenue loss as compared to regular radio, which offers many less options in terms of distribution.

Fair enough. But internet radio stations are simply asking to pay the same rates as satellite radio, which also offers a digital feed that can be captured by some consumer devices. (Granted, many of these devices are encumbered with DRM-ish "features.")

The content of these stations is the music. The value of the station to advertisers is the number of people who are going to listen to it AND those stations use those stats to price their ads with the ad providers. Paying pay-per-track rather than pay-per-listener is clearly inequitable when the stations themselves earn money on a per listener basis.

The issue here is that internet radio stations want to pay what satellite radio pays. They were already paying double what satellite radio pays, and now they face astronomical increases that would bankrupt them.

This current plan to hike royalty rates would be apocalyptic for internet radio. Its retroactive effect alone (back to January 1, 2006) would bankrupt all but the huge players.

Here are some useful sites where you can find out what you can do. If nothing else, contact your congressional representatives and tell them to save internet radio by sponsoring the Internet Radio Equality Act.

I now know who cares and who doesn't.
I got a letter back within about a week from Jim Matheson, our Representative, who seemed very adamant about how wrong this proposed legislation is. He even went on in detail about why he wanted internet radio to stay the way is is (or become free, even).
Bob Bennett didn't respond.
Orrin Hatch, who is himself a recording artist (in a loose usage of the term), seemed to be sidestepping the issue in the letter he sent back. It was almost as though he agreed with the rate hikes. How someone who gets paid to make music can support the RIAA is beyond me.
Though I guess Roarin' Orrin's reply didn't really surprise me, I guess there are things in life you never get used to.

I got a letter back within about a week from Jim Matheson, our Representative, who seemed very adamant about how wrong this proposed legislation is. He even went on in detail about why he wanted internet radio to stay the way is is (or become free, even).

This issue is emblematic of a much larger phenomenon that is only going to increase over time. That phenomenon is the increasing gap between modern society and what the bureaucracy perceives it to be. The government had enough trouble when change was slow. Now as the speed of change gets quicker by the week, the out-of-touch nature of government becomes not just an issue to laugh about, but one to be of great concern. Political ideology combined with an insularity from change will stifle those who are the best and the brightest at the expense of those that are the most powerful.

....establishing a network of stations, for profit, extracted out of the many and various web broadcasters.For the only way to deal with the irrationality of what is proposed is to do so with money and teamwork between the broadcaster. And that typically happens through business broadcast networks.

In other words, what many web broadcaster have accomplished in establishing web broadcasting audience is now going to be taken away from them as they go out of business or are merged and either shut down or become

Now I'm going to say two words that will automatically get me modded down around here, but Rush Limbauqh had a segment about this on his show a few weeks ago when he was explaining why internet feeds contained minutes of silence during song parodies, etc. and about this new policy and how it was going to kill internet radio and wasn't fair. He explained that for his show, it could easily translate into $36,000 a day worth of royalities that would be hard for even a show with a large audience (and high ad rates) to cover.

I do listen to a lot of Online Radio, primarily KTRS 550, and KMOX out of my home town of St. louis at work. There are some afternoon shows I like to listen too and now since I live out both of their radio range (I can get KMOX sometimes at night, but now that the Cards games have moved...)

Still I listen to more podcasts of shows that aren't in my market like the Tony Kornheiser show and then some of the ESPN shows like PTI.

I had my own radio show on the college radio back in the day, and I remember we were charged by the song, not the number of listeners, but as a low power system, I'm not sure how all those rates are calculated anymore. If that is still the case, this just seems like a way to cut competition for terrestrial radio stations.

Hasn't the music industry realized yet that without radio (in any form) they would have zero distribution for new music and fall flat on their faces? If anything, these radio stations should be paid by the record labels for playing their songs for free and getting them much needed exposure, especially when it comes to the next big pop artist. Unbelievable.

Thats the whole point of what the RIAA are doing to internet radio.They want to kill all competition for the top-40 crapola plays exactly what the RIAA wants them to play stations (clear channel et al)

The RIAA likes radio but only when the stations are playing the music that the RIAA thinks should get promotion (i.e. the next big pop artist) and not what someone else thinks should get promotion (i.e. that obscure indy rock band)

No dealing with bad net connections or other shit. Just turn on XM receiver and boom music.

Only thing I love/hate are the top hits lists. Seems like there isn't much variation (maybe the fans really do vote for the same stuff day in day out), but fortunately there are rock/techno/classic channels to pad out the day:-)

Nobody said you had to unicast music over TCP/IP. That was your choice. Now they're adding ridiculous rates to the mix, hey, don't play RIAA brand music. Problem solved.

As the operator of a synthpop and darkwave internet radio station [mirrorshades.org] (plug!) myself, my response is "kiss my ass". Like most other stations, I broadcast things that aren't ever going to be heard on conventional radio, giving (relatively) niche or obscure artists that much more free exposure. I know this works for two reasons:

1. I myself have bought albums after hearing certain artists' songs on other net radio stations -- music I would never, ever, ever have heard otherwise except perhaps in the drunken haze of a goth club.

2. Several independent artists have sent me singles and even entire albums and other promo kits, encouraging me to put them in rotation. One synthpop artist [jamesdstark.com] wrote:

Thanks I appreciate the exposure, it's hard to get the music out as an independent artist which is why I'm trying to get radioplay. The CD is the mail.

And another [redflag.org] said, after sending me some tracks and I liked them but mentioned I'd never heard of this group before:

Yeah, that is what we are experiencing with Red Flag. The darkwave scenejust loves the music but we need to really get the message out there.

This has happened dozens of times. It's good for the artists who are trying to get noticed; it's good for the audience who gets to discover new music; it's good for the broadcaster cause it's just fun. I get permission from many of the labels or artists to play their stuff, and when I don't, well, it's a freaking 96k broadcast that can't be copied without some technical know-how (certainly much more difficult than jamming a tape into your radio and hitting "record"). Exactly who is being harmed here?

You know, there ain't no Benjamens in the net broadcasting trade. We do this for fun and the love of the music. The RIAA's outmoded and antiquated business models, and their continued attempts to strangle the life out of emergent technologies, is absolutely appalling. I'll continue to broadcast from my host in Germany and here's a big screw you to the suits. I don't make a single cent off my broadcast, and I don't play the kind of music that would come close to competing with the mass-appeal fare on the normal airwaves. You'll never get a dime from me.

This law only kills internet radio in the United States, it doesn't affect internet radio stations outside the US. I already listen to stations outside the US, and I'm sure there will be a heckuva lot more if this legislation passes.

So, in effect, this law will only serve to outsource these stations to other countries -- places where the RIAA can't extract any royalties at all. Brilliant, RIAA, brilliant...

This might actually be a good thing. How? Internet radio webcasters could still use non-evil licensed music such as available on places like magnatune.com [magnatune.com]. That would then give the non-evil music more air-play and boost its acceptance over that of the companies with the old business model of music (based on rape the listener just enough to avoid their death). Carried far enough, maybe the old business model will finally die the death it deserves.

Let mp3/ogg/wma/whatever propagate where they will. If you never pay for music now, you never will. And then there are those like me who like to sample things before spending money on it. If it's something I won't listen to more than a few times here and there, I likely am not going to buy it. Why should I? I'd be happy to just listen to it on the Internet streams or radio when it plays. No need to own something like that. Of the mp3s that I have downloaded, I've either bought the CD used (or borrowed from a friend if even the used price was ridiculous... usually the 'one good song on the whole disk' situations), or simply removed the downloaded stuff, since it isn't something I listened to much, and if I did, I'd want better quality.

Use compressed music as advertisement.

Artists should be making most of their money off of live performances.

Sell CDs for a reasonable price (this is the real problem, RIAA. Why are you too greedy to see this?). $10 instead of $20. I *might* pay $15, if it is an artist I really dig and there are a lot of good songs on the CD. For older music, sell it for $5-$8 per CD. Sell MP3 CDs with 3-10 albums on them in compressed format for $20 (or the equivalent online, whatever).

Why is this so difficult? People don't pay for the shit because it's ridiculously over-priced. I definitely won't pay for compressed music, and buy most stuff used these days, or from local bands themselves at CD release parties ($5 a CD).

Compressed music == advertisement for the real product. If your product isn't worth paying for, then maybe you should fix THAT problem. For stuff I like and want to add to my collection, I much prefer having the uncompressed 'master' to encode and catalog as I see fit. (on that note, stop with the bullshit DRM crap, Mmmkay?).

Stop buying new CDs or MP3s is the first thing you can do. If you need it that badly, go buy it second hand or just listen to it on a FM or Digital radio station. Support your favorite artist by going to their concerts and buy their merchandise at those concerts. Music Industry has to go, it's up to all of us to starve it to death.

"Millions for defense, but not one penny for tribute,"Robert Goodloe Harper (1818)

Rather than writing you representive, in this case it might be better to write your favorite band. Tell them which albums you have and the concerts you went to, and then tell them you can't buy any more of their CDs because their music is covered by SoundExchange. Ask when they will release an album under creative commons.

... thereby proving their assertion that digital music / piracy is "bad" for their industry and inserting another nail in the coffin of digital rights. (The real kind, not the software enforced things that inhibit duplication of data.)

Didn't this all happen five years ago? Somafm went away for some royalty reason. Then a few years later everything was fine again. What's different this time around?

You can read about what happened in 2002 on their website [somafm.com]. Basically, the record companies demanded $500 per day from SomaFM. SomaFM and its listeners responded by encouraging Congress to pass the Small Webcasters Amendment Act which reduced the royalty rates to a more manageable $2000 to $5000 per year.

The short answer is "no." In fact, internet radio stations would much rather have it the other way around: they want to pay what satellite radio pays. Right now, they're paying twice the satellite rate, and the new increases would push internet radio rates astronomically higher, retroactive to January 1, 2006.

In effect, the RIAA (through the Copyright Royalty Board) is trying to kill internet radio.